Tuesday 3 August 2010 15.28 EDT
First published on Tuesday 3 August 2010 15.28 EDT

When it was launched 12 years ago, the name was intended to be quirky and appeal to internet users. But with the dotcom boom having turned to bust and the financial services industry fighting to restore its reputation, banking brand Egg is on some people's faces rather than everyone's lips.

Three years after buying Egg from the Pru, which floated off part of the operation and then spent years trying to get rid of it, Citigroup is preparing to put the internet-cum-telephone bank on the block – and is expected to be left nursing a loss.

Citi bought Egg for £575m just before the banking crisis in 2007 – a relief to Pru, which had a difficult relationship with the business it created in 1998 when the pressure was on to make money from internet start-ups. It floated in 2000 but never managed to turn much of a profit, despite its memorable advertising campaigns.

The US bank bought Egg when it was trying to attract UK customers. That was before it needed bailing out by the US government and a rethink of its strategy.

Egg has been housed in its Citi Holding division, where businesses, since the bailout, are regarded as non-core. Citi would not comment on the possible sale of Egg, but noted that was situated in the division from which disposals are being made.

The sale is reportedly to begin in the autumn when other banking businesses are on the market. Santander, for instance, was tonight thought to be close to completing the terms on which to buy 318 branches from Royal Bank of Scotland.

Citi said its strategy was to "reduce its assets and operating businesses within Citi Holdings in an economically rational manner while working to generate long-term profitability and growth from Citigroup, its core franchise".